TRELLEBORG, Sweden—Trelleborg AB is extending its previously announced COVID-induced restructuring in anticipation of the long-term effects of the pandemic in certain markets.
The Swedish group expects the costs of the reorganization to amount to $78.7 million for the full year 2020, more than twice the $33.7 million announced earlier in the year.
The measures are expected to bring in savings of $78.7 million on a full-year basis, with full effect as of 2022, Trelleborg said July 20.
The initiatives, according to the polymer group, will address production and sales structures in all business areas and aim to enhance the efficiency of the organization.
"We believe COVID-19 will change the environment long-term in some areas so we start preparing for a new normal by implementing some extraordinary measures," Karin Larsson,Trelleborg's vice president of media relations, said in a written statement to ERJ.
The costs, according to Trelleborg, are distributed by approximately one third each between the Trelleborg Industrial Solutions and Trelleborg Sealing Solutions business areas.
The remaining amount is distributed equally between the Trelleborg Wheel Systems business area and the Businesses Under Development reporting segment.
According to Larsson, the restructuring program will entail a mix of measures, including job cuts.
"We have communicated job cuts in Trelleborg businesses working within aerospace and automotive, segments particularly hit by the effects of COVID-19," she added.
Among other measures, Trelleborg has decided to consolidate its offshore oil and gas facility in Brazil and transfer that production to other sites within the group.
On the upside, Larsson said, the Swedish polymer engineering group is investing $135 million in its manufacturing facilities and product innovation this year.
"That is lower than we expected in 2019 but still a significant figure," she added.